Marketing strategy: discerning the relative influence of product and firm characteristics

Abstract

A business’s marketing strategy decisions (how a business chooses to compete in the marketplace) are informed by the characteristics of the firm, the product offering, the target customers, the industry, and macro environment, among other factors. The literature in marketing focusing on the marketing strategy implications of product characteristics and customer characteristics is vast and extensive, spanning several decades. During the past four decades, literature insights from the fields of economics and management have contributed to enhancing our understanding of the marketing strategy implications of industry characteristics and firm characteristics, respectively. While the marketing strategy implications of product characteristics generalize to all competitors of a specific product offering, the marketing strategy implications of firm characteristics are idiosyncratic to individual competitors. Competing businesses strive to achieve and sustain defensible competitive positional advantages in the marketplace by effectively leveraging their organizational capabilities to deploy firm resources that are valuable, rare, inimitable, and/or non-substitutable. In effect, heterogeneity in resources and capabilities manifest as heterogeneity in the business and marketing strategies of competitors. A likely consequence of heterogeneity in organizational capabilities is differences among competitors in their quality of understanding the marketing strategy implications of product characteristics and, in turn, their marketing strategies informed by the distinctive characteristics of the product offering. Against this backdrop, this article explores the relative influence of product characteristics and firm characteristics on a business’s marketing strategy and the moderating effect of firm characteristics.